ML20091J758

Forwards Corrected Info Re Independent Mgt Appraisal Plan Requested During 840504 Meeting

ML20091J758
Person / Time
Site:	Midland
Issue date:	05/29/1984
From:	Jackie Cook CONSUMERS ENERGY CO. (FORMERLY CONSUMERS POWER CO.)
To:	James Keppler NRC OFFICE OF INSPECTION & ENFORCEMENT (IE REGION III)
References
29805, NUDOCS 8406060172
Download: ML20091J758 (17)

Text

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.- yb Collsumers Power James W Cook Vice President - Projects, Engineering and Construction oeneral Offices; 1945 West Parnell Road, Jackson, MI 49201 e (517) 788-0453 May 29, 1984 , g', V 1 A lo A#

Hr J G Keppler, Administrator US Nuclear Regulatory Commission Region III 799 Roosevelt Road Glen Ellyn, IL 60137 MIDLAND ENERGY CENTER -

MIDLAND DOCKET NOS 50-329, 50-330 -

MANAGEMENT APPRAISAL PLAN FILE 0505.2 SERIAL,29805 Enclosed is the information you requested during the May 4, 1984 meeting in Midland concerning the Independent Management Appraisal Plan. The information includes copies of slides used and responses to the questions asked in your April 16, 1984 letter to me. As explained in the enclosed May 23, 1984 letter from CMP, only the corrected information is being provided.

JWC/JNL/bjw CC DSHood, US NRC Licensing Branch #4 NRC Resident Inspector Office, Midland OM/0L Service List 8406060172 040529 PDR ADOCK 05000

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OM/0L SERVICE LIST Mr Frank J Kelley Atomic Safety & Licensing Attorney General of the Appeal Board State of Michigan U S Nuclear Regulatory Commission Ms Carole Steinberg Washington, DC 20555 Assistant Attorney General Environmental Protection Division Mr C R Stephens (3) 720 Law Building Chief, Docketing & Services Lansing, MI 48913 U S Nuclear Regulatory Commission Office of the Secretary Washington, DC 20555 Mr Myron M Cherry, Esq Suite 3700 Hs Mary Sinclair Three First National Plaza 5711 Summerset Street Chicago, IL 60602 Midland, MI 48640 Mr Wendell H Marshall Mr William D Paton, Esq RFD 10 Counsel for the NRC Staff Midland, MI 48640 U S Nuclear Regulatory Commission Washington, DC 20555 Mr Charles Bechhoefer, Esq Atomic Safety & Licensing . Atomic Safety & Licensing Board Panel Board Panel U S Nuclear Regulatory Commission U S Nuclear Regulatory Commission East-West Towers, Room E-413 Washington, DC 20555 Bethesda, MD 20014 Ms Barbara Stamaris Dr Frederick P Cowan 5795 North River Road 6152 N Verde Trail . Rt 3

• Apt B-125 -Freeland, MI 48623 '

Boca Raton, FL 33433 Dr Jerry Harbour Mr Fred C Williams Atomic Safety & Licensing Isham, Lincoln & Beale Board Panel 1120 Connecticut Ave, NW, Suite 840 U S Nuclear Regulatory Commission Washington, DC 20036 East-West Towers Room E-454 Bethesda, MD 20014 Mr James E Brunner, Esq Consumers Power Company Mr M I Miller, Esq 212 West Michigan Avenue Isham, Lincoln & Beale Jackson, MI 49201 Three First National Plaza 52nd Floor Mr D F Judd Chicago, IL 60602 Babcock & Wilcox PO Box 1260 Mr John Demeester, Esq Lynchburg, VA 24505 -

Dow Chemical Building Michigan Division Mr Steve Cadler, Esq Midland HI 48640 2120 Carter Avenue St Paul, MN 55108 Ms Lynne Bernabei Government Accountability Project Mr P Robert Brown 1901 Q Street, NW Clark, Klein & Beaumont Washington, DC 20009 1600 First' Federal Bldg Woodward Ave Detroit. HI 48226 3/14/84 MIO983-0002A-MPO4

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Cresap, McCormlck and Paget dvoon of TCfWERS. REN. FORSTER & CROSBY

-- 200 WEST MADSCN STREET, CHCAGO. L 60606 (312)263-7125 TELEX 254151 May 23, 1984 Mr. James W. Cook Vice President Projects, Engineering and Construction Consumers Power Company 1945 West Parnall Road Ja.cks o n , Michigan 49201

Dear Mr. Cook:

As I discussed by telephone with Mr. Nate Leech earlier today, I am forwarding revised copies of the CMP responses to the NRC's comments previously-provided with Mr. L. R. Wass' letter of May 14, 1984. The' revisions consist of inserting comment and response designators that had been omitted and correcting several typo-graphical errors that existed. The wording of the responses has

.not,been changed.

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Please replace the initial version of the responses with those

- encloced and forward to the NRC.

We apologize for any inconvience that this may have caused.

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Sincerely,

h. Y- #

A. D. Fakonas Principal

.cc: S . - II . Howell - CPCO J. A. Schmidt - CMP

, }/ A. D. Fakonas - CMP D. Davis - TERA

'$ 'H. Levin - TERA Enclosures

s PRESENTATI0M OBJECTIVES

! e TO INTRODUCE THE PROPOSED APPRAISAL TEAM LEADERS.

o TO BRIEFLY REVIEW THE INDEPENDENT MANAGEMENT APPRAISAL PLAN I SUBMITTED BY CMP AND TERA.

e TO RESPOND TO MRC COMMENTS AND QUESTIONS REGARDING THE PROPOSED PLAN.

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OBJECTIVE AND SCOPE i

OBJECTIVE i

e REVIEW AND EVALUATE CONSUMER POWER COMPANY'S (CPCO'S) MANAGEMENT APPROACH TO COMPLETION OF THE MIDLAND NUCLEAR PROJECT.

SCOPE e CPCo'S MANAGEMENT CAPABILITIES (DEFINED BY ORGANIZATION, WORK l METHODS, AND SYSTEMS) TO MEET REGULATORY AND OWNER REQUIREMENTS.

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e ACTIVITIES AND PLANS OF VARIOUS CONTRACTORS.

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l APPROACH e APPRAISAL TEAM ORIENTATION e RECONNAISSANCE TO DETERMINE PROJECT STATUS AND IDENTIFY ISSUES i

e ASSESSMENT OF CPCO'S MANAGEMENT PLAN TO COMPLETE THE MIDLAND

PROJECT e REPORT PREPARATION 1

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STUDY TEAM COPPOSITION e CMP HAS OVERALL RESPONSIBILITY FOR CONDUCTING THE STUDY e TERA WILL SUPPORT IN TECHNICAL AREAS, AS DIRECTED BY CMP e APPRAISAL TEAM LEADERSHIP:

- 0FFICER-IN-CHARGE: LEONARD WASS

- 0FFICER ASSISTING: JEFFREY SCHMIDT

- ENGAGEMENT MANAGER: TONY FAKONAS

- SENIOR TERA REPRESENTATIVE: DONALD DAVIS

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l TOPICS OF NRC COMPENTS

1. ROLES AND RESPONSIBILITIES OF CMP AND TERA

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2. CONFLICT OF INTEREST

3. STUDY TEAM STAFFING I

4. REVIEW OF MANAGEMENT CAPABILITIES i

5. DEPTH OF CMP APPRAISAL 1

6. EVALUATION OF MANAGEMENT COMMUNICATION SYSTEMS AND MANAGEMENT PRACTICES

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- TOPICS OF NRC COMENTS (CONT'D) i i

k l 7. APPRAISAL PLAN RECONNENDATIONS

8. RETROSPECTIVE REVIEW l 9. IDENTIFICATION OF "VARIOUS CONTRACTORS"

! 10. EXPANSION OF TENTATIVE INTERVIEW LIST 1

11. REVIEW OF LICENSEE'S RESPONSES TO SALP 3 RECONNENDATIONS i

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CMP RESPONSES TO NRC COMMENTS ON THE PROPOSED MIDLAND INDEPENDENT MANAGEMENT APPRAISAL PLAN The ensuing material contains CMP's responses to NRC comments on.the proposed Midland independent management appraisal plan, dated March 7, 1984. These comments were originally contained in Enclosure 1 of an NRC Region III letter dated April 16, 1984.

Comments (C) are presented verbatim prior to each CMP response (R).

C1 -The independent management appraisal of CPCo is proposed to be performed by Cresap, McCormick and Paget (CMP) and TER A Corpora-tion (TERA). The plan does not identify how the two organizations will function and interface nor how the responsibilities for per-forming the appraisal, analyzing the findings, and making recom-mendations will be assigned or shared between the two organiza-tions. The plan should identify the roles and responsibilities of CMP and TERA in working together as a' team in performing this appraisal.

R1 CMP will have overall responsibility for directing the study, analyzing the findings, and making recommendations. As such, the CMP project manager will assign specific work tasks to team members, including TERA.

TERA will provide support, as directed by CMP, in areas where TERA's engine (sring and technical expertise are relevan t. Specific areas where TERA will be assigned can not be determined until the reconnaissance step is completed, but it is expected tha t they might be involved in evaluation of areas such as:

o NRC regulatory requirements o Nuclear engineering and construction practices o Informa tion systems and records management o QA/QC practices o Soils issues.

It is a common practice for CMP to subcontract with technical personnel to supplement our resources in areas where management and technical issues are closely interrelated. We are experienced in managing subcontractors on our project teams and do not envision any difficulties in that regard on this study.

C2 The participation of TERA in the independent management appraisal has the potential for creating a conflict of interest based on previous and current TERA involvement at Midland. Please explain the basis for your conclusions that TERA's participation does not represent a conflict of interest.

R2 CMP believes that TERA's participation on this study does not represent a conflict of interest for several reasons. Firs t , the NRC has previously approved TERA's independence from CPCo.for the Independent Design and Construction Verification Program (IDCVP) and implicitly continues to do so. Second, CMP's understanding (and we have reviewed this with TERA) is tha t the scope of the IDCVP is independent from the proposed study. TERA's activities on the IDCVP involve evaluation of engineering results for three specific plant systems and do not consider evaluation of management processes at all. Finally, and most importantly, since CMP will be making all project assignments, CMP will require that no TERA staff with direct responsibility for the IDCVP would be assigned conflicting responsibility on the proposed study.

Specifically, we will not allow any TERA employee to participate on any aspect of the proposed appraisal that would involve review of activities related to TERA's IDCVP ef forts.

CMP believes tha t TERA's participation would benefit the proposed study. Because of TERA's previous familiarity with the project, they can immediately provide insight into CPCo's manage-ment operations. Any other consultants would probably be able to develop a similar understanding of CPCo only af ter substantial expenditures of time and effort.

CMP had originally suggested TERA to CPCo for the proposed assignment for the previously cited reasons.

C3 Appendix A includes a list of "likely" members of the apprai-sal team. CMP and TERA should provide the list of actually assigned team members. This list, together with independence statements and resumes for all actual team members, needs to be furnished to Region III for the NRC staf f evaluation of team l members' competence and indendence. Additional or substitute team members are expected to also mee t the competence and independence l criteria.

R3 CMP intends to select our project team members from among l those whose resumes are included in Appendix A of the appraisal l plan. Because of uncertainty in the authorization of commencement l of the proposed study and CMP's on-going workload, indentification of the complete project team staf f can not be made at this time.

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, CMP's' project team leadership, however, can be specified and will be as follows:

Leonard Wass, Vice President and head of CMP's utility consulting practice, will have overall responsibility for the appraisal.

Jeffrey Schmidt, Vice President, will assist Mr. Wass in

, key aspects of the work. "

Tony Fakonas, Principal, will oversee day-to-day administration and coordination of the stu,dy team's work.

Since'the original plan was developed,. TERA's proposed team staf fing has changed. Mr. Donald Davis, whose resume was included j in the plan, will replace Mr. John Beck as TERA's senior represen-tative. Also, Mr. Jim Owens will be unavailable for this assign-ment.

Copies of the independence statements.for the potential team

members were provided to the NRC during the May 4, 1984 meeting.

Should either CMP or TERA find it necessary to utilize any personnel other than those identified in the plan, we would be i- -happy to submit' resumes and independence statements to the NRC for approval prior to placing'other personnel on the appraisal team.

. We would also be happy to arrange interviews between the NRC .staf f and our team members, if desired. A list of_the specific staff that- will be assigned to the appraisal team will be provided to the NRC at the start of the study.

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C4 The' order specifica11y' requires the apprecisal; to include

, review of " management and supervisory personnel involved in the L Midland project to determine their capability and competency for managing construction activities consistent with regulatory l requirements," but the appraisal plan makes no reference to such an evaluation. The appraisal plan should address this requirement.

x R4 In these kinds of studies, it is customary to conduct an overall review of management capabilities. For this study, CMP intends to first identify the management and supervisory-capabilities needed to effectively manage completion of the Midland Project. In light of these requirements, CMP will then review CPCo's and key contractor's current capabilities, focusing i

on number of personnel and types of skills needed at appropriate levels of' management, to identify shortcomings.

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.. 5 In those instances where the positions as constituted of management or supervisory staf f are influencing factora to the issues or problems identified, we would comment. Su c! comment would focus on the content of the job or structural design of the organization and the implications for the issues or problems being addressed. As appropriate, we would observe whether the affected positions or family of positions fully or partially meet the requirements that we feel are needed in these positions. Our recommendations in those cases where requirements are partially met might include the addition of staff, realignment of responsi-bilities, or other actions to shore up a managment or specialty function. Other recommendations may restructure a position to

• free it of unnecessary or distracting work.

C5 The depth of the CMP management appraisal is not clear. No reference is made to specific events or cases to be independently examined to determine if the information developed through the interview process can be substantiated.

R5 The interview process is only one of many fact-finding sources and techniques used by CMP in conducting assignments. As a matter of practice, CMP will not base conclusions solely on information gathered from interviews, especially from a single source. This approach will be applied to the proposed study.

Every attempt will be made to confirm information gained through interviews with tangible evidence. Typically, the confirmation process may include review of one or more of the following items:

- External correspondence

- Internal memoranda l - Reports

- Existing CPCo and contractor analyses I

l - Established procedures, and l

- Othe r relevan t, available documentation.

, Section V of our proposed work plan contains a preliminary data l request to allow us to begin this process. Additional data and L

documentation will be requested during the course of the j

assignment.

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Other methods that we of ten use to substantiate information include our own analyses of data and, if appropriate, direct observation. The specific methods used to substantiate informa-tion obtained in interviews will be tailored to fit :he item being investigated.

Because we can not yet identify the issues that will arise during our fact-finding, a more specific identification of the events, cases, or documents that will be independently examined can not be made at this time.

C6 The Order specifically requires the appraisal to include a review of " management controls, (management) communi' cation systems and (managemen t) practices, both at the Midland site and between the corporate office and the site." The appraisal plan should describe the intended evaluation of management communication systems and management practices.

R6 CMP intends to evaluate CPCo's management communication systems and management practices as part of the overall appraisal, as required by the NRC. The comprehensive list of systems and practices to be examined will be determined in light of the signi-ficant issues that are identified during the fact-finding; how-ever, some of the items that we expect will need to be reviewed based on our experience from similar studies include:

- Reporting relationships and lines of communications within and between CPCo home office and site organizations as well as their attention to detail

- Interf ace relationships and lines of communication between CPCo and its contractors, regulators, and other involved external parties

- Methods of communications, such as letters, memoranda, telexes, meetings, briefings, conversations, or others, and circumstances in which each are used

- Documented interface procedures

- Adherence to approved guidelines for communications

- Participation of appropriate levels of management in project monitoring and decision-making

- Processes for identification of potential problems and implementation of corrective actions

- Processes for ensuring follow-up to corrective actions and ensuring results

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- CPCo delegation of authority These evaluations are broadly incorporated.in the major tasks identified in Step III of our work plan, which covers the assess-

.ments of project management concepts, organization and staffing, monitoring and control processes, and close-out and start-up plans.

C7 The NRC Order specifically requires the appraisal plan to include the provision of recommendations for changes that will provide assurance that the licensee will implement NRC require-me n t s . .The appraisal plan should confirm that the required recommendations.will be made. The appraisal should'also consider whether or not any past consideration of cost and schedule factors affected construction quality.

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R7 As an end product of the appraisal, CMP will make specific recommendations to help ensure that CPCo is able to effectively manage completion of the project in a way that is consistent with the NRC's regulatory requirements. We will attempt to elaborate

on our recommendations so that they are clear and unambiguous. In

. addition, after the final report is submitted, we will meet with CPCo management to explain the recommendations and answer any

. questions it may have.

To address the NRC's final point, CMP's review will focus on ma nageme n t , not technical, issues- thus, an evaluation of. physical j construction quality will not be made.

l C8 The CMP management appraisal appears to be limited to a prospective evaluation to determine how CPCo should proceed in l

completing the Midland project. The Order requiring the manage-ment appraisal was issued because of the past history of continued quality problems. The appraisal plan needs to include a retro-spective evaluation of suf ficient past events / problems to iden-tify the contributing factors and causes of problems and manage-ment's responses to them. This will provide CMP with an under-standing of how the project got to where it is today, in order to permit CMP to develop recommendations where necessary for improve-ments in organizational responsibilities, management controls, communications, and practices to comply. with the Order.

t R8 CMP has no disagreement with the NRC's comment. CMP's under-standing is that the NRC's objective for this appraisal is to provide an independent assessment of the adequacy and practicality of CPCo's planned management approach for completing the Midland I

project in conformance with regulatory requirements. In light of this, CMP's proposed approach focuses primarily on a prospective

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evaluation of CPCo's plans, with a limited retrospective evalu-ation to orient our consultants to the unique circumstances surrounding this project.

We believe that our work plan is consistent with item 8 of the NRC's comments. As indicated on Page 1 of Exhibit II-l of CMP's proposed work plan, the objective of the reconnaissance step includes sufficient fact-finding to understand the evolution of the current situation and the steps CPCo is taking to correct past problems. We intend to review past events to the extent necessary to allow us to determine whether unique factors contributing to past problems still exist and might potentially detract from CPCo's ability to manage the project in the future.

CMP had not envisioned conducting and documenting an in-depth and definitive evaluation of the root causes of past problems.

Given the duration and complexity of the Midland Project, a comprehensive, retrospective review would be a very large under-taking (and in our opinion, not useful to the intent of the NRC order).

C9 The plan should identify the "various contractors" referred to in Part I, Objective and Scope, of the appraisal plan. The list of interviewees includes only Bechtel; no other contractors are identified.

R9 In conducting the appraisal, CMP intends to consider the activities and plans of key contractors involved in completion of the plant. Because we have not yet conducted any fact-finding, CMP is not familiar with the key contractors (except for Bechtel) tha t are or will be on site and wha t their roles are or will be.

Fo. 'his reason, potential interviews with contractors other than Bechtel were not included on the Tentative Interview List (Section IV of CMP's plan).

The Tentative Interview List included in the plan was devel-oped f rom limited information and is not intended to be exhaus-t1ve. As indicated in the first page of Section IV, we intend to modify the list as the study proceeds and other appropriate interviewees are identified. In fact, we will invite suggestions from the NRC staff regarding candidate interviewees tha t we should consider.

C10 CMP should consider interviewing representatives f rom all levels of supervision and management, as well as construction workers, QA/QC inspectors, and other workers. CMP should also consider interviewing previous workers of CPCo and Bechtel.

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R10 CMP agrees with the NRC comment. By conducting interviews, we are looking to expand our factual base of information. As ex-plained in the response to NRC comment #9, we intend to modify the Te n ta tive Interview List as we become more familiar with the pro-ject and are able to identify additional, appropriate inter-viewees. We will consider all candidates suggested to us to determine how they could help expand the factual base. In pre-vious studies of this nature, we have interviewed such external parties as intervenors, forme r employees, industrial and consumer representatives, and members of the print and electronic media.

We would like to emphasize, however, that these ' interviews will be strictly one-way, in that we will be seeking facts and will not be providing information in return.

Cll The SALP 3 for Midland, dated September 16, 1983, identified continuing problems in the soils area. The SALP Board recommended that the licensee review the performance of construction, engi-neering, and Quality Assurance managers in the soils area. The management appraisal should include a review of the licensee's followup actions in response to this NRC recommendation.

Rll CMP agrees with the NRC and intends to review CPCo's follow-up actions in response to the SALP 3 recommendation. Review of this topic had been anticipated in our proposal, as indicated on page 1 of Exhibit II-l and by the soils-related interviews already iden-tified in the Tentative Interview List.